Special Internet Pricing?

[Chris K]

Our dealership has two distinct sales departments: Land Based, and Web Based. The reason the Internet Prices appear lower are because they are HAGGLE FREE, and our operation costs are lower than the showroom. You might get the internet price if you fight hard enough in the store with a regular salesperson, and haggle, but the showroom dealership reserves the right to make as much money as possible - it's not a crime. However I use this terminology to my advantage. When I advertise a sale price online or in an email, I tell them this price shows "90% OFF" retail, which is similar to what a Furniture Store does or other retail outlets.

A dealerships reluctance to empower their Internet salespeople with a few set prices on certain cars (ie: Invoice, $100 under or over a specific model) shows utter ignorance to reality.

I get people who are shopping me after seeing one of our salespeople in the showroom, then come online, but as soon as I discover what they are doing I refuse to assist them, and advise them this is unethical and refer them back to their original salesperson.

 

[Alex Jefferson]

Chris I agree with your statement, "A dealerships reluctance to empower their Internet salespeople with a few set prices on certain cars (ie: Invoice, $100 under or over a specific model) shows utter ignorance to reality".
However, I am curious about how your "NO HAGGLE PRICING" works in terms of customers who may come into the store and not give their information to a salesperson. In this situation they would not be in your CRM tool which would mean they could still get the internet price. Also, what about the customer that buys and then later finds out they could have gotten it on the internet for 2,000 cheaper. Do they ever walk into the showroom again. Does that turn everyone into an "internet customer"?
I think that is a great idea for your pay plan right now. But what about when the dealer figures it out as it relates to "incremental" business. Just some thoughts I wanted to throw out there. I see huge things in the future for us at the forefront and wanted to get everyone's thoughts on where we all know this thing is going. Alex touched on it in one of his earlier posts saying "they're all Internet customers"!

 

[Frank Davis]

Chris wrote:
I get people who are shopping me after seeing one of our salespeople in the showroom, then come online, but as soon as I discover what they are doing I refuse to assist them, and advise them this is unethical and refer them back to their original salesperson.

Why would you do that? As a manager you should work that deal for that salesperson on the floor. You should do what it takes to get that customer back into the dealership. You should never use a negative like unethical.

As for price, I will say it again, "price does not matter" sell yourself, sell the car, sell the dealership

 

[Frank Davis]

Chris I do agree with you when it comes to price as you hit it right on the head. Why deal with internet when I can get the same deal by walking in? Because internet prices are "no haggle" prices. That is why there is an Internet shopper. There are many kinds of shoppers, everyone is unique. It is not just black and white.

 

[Wayne Anderson]

@Frank:

you wrote:
"Because internet prices are "no haggle" prices."

I, personally, stay away from claiming 'no haggle' anymore. I want to give the customer 'hope for gain'.

No haggle was good back in the early to mid 90's with Saturn because the customer was at an information disadvantage.

Definitely not anymore. Now everyone is armed with vehicle information and feeling a little dangerous...

I believe the majority of people want to haggle a little and view 'no haggle' as another way for the dealer to control the customer. I could be wrong and welcome input from others, but I hear hundreds of phone calls a month and can hear it in their voices.

Overall, the customer's confidence is up. They are not as afraid of being taken...and they know if your 'no haggle' price is a good deal or not.

Besides, with the current economic climate, people are fighting more for any kind of discount they can get. You bet some want to haggle.

 

[Frank Davis]

Hello Wayne

I agree: Yes they do want to haggel, but we still need to give people a reason to shop the internet and if I can keep my gross on my internet price I sure want to do just that. You know the old term " if I could would you" still works just as good today as it did 25 years ago, and looking someone in the eye and letting them know our internet price is the best available still works also, but let me ask you does price really matter? Or is payment?

 

[Wayne Anderson]

Frank,

From my experience & market, payment matters the most once the customer is in the showroom & negotiating. I agree 100%, showroom sales systems used 25 years ago still work today, but the customer has to be in the showroom.

Until we get to that point, we have to go use, as Jeff puts it, 'new marketing'.

 

[Frank Davis]

Wayne wrote

Several of you have different opinions about pricing, and you all may be correct. There is not a single pricing strategy that works in all situations/markets.

I know firsthand that pricing strategies work different in the Special Finance Markets (a rapidly growing market BTW). These folks are more concerned about obtaining financing. Price is not their top concern, at first. Payment is more important than price in this market.

Also, are you a volume store or high gross store? Many will say, "we want both." But having it both ways is not realistic.

We prefer high gross - you can always come down in price to scoop up the prime, but you can't go up.

Then you wrote the above: you have me a little confused Wayne, Take a look at both statements they are very conflicting to say the least.

 

[Wayne Anderson]

Frank,

I'd be happy to clarify those two statements since they were each written with a different context as they relate to the overall purchase process...

Price, payment, and getting financed are the 3 top objections for me. Their ugly heads pop up during different stages of road to sell:

PRICE:
This battle happens before the customer enters my funnel. Customers are making decisions about whether or not they want to engage your dealership based on your displayed (or undisclosed) price. Who knows how many we gain or lose by showing or not showing a certain price. I display "List" prices and remind everyone that nobody pays the "List" price. Again, I should remind you that my market is mostly Special Finance. But most of my customers (including my prime buyers) know they don't pay "List". They want to haggle a little.

FINANCING:
I fight this battle over the phone mostly. Special finance customers want to be reassured that their time will not be wasted..again.

PAYMENT:
After winning the first two battles and getting them to show, Mr. What's My Payment shows up during the negotiations. I'm not fighting the payment fight over the phone. Mr. Price Objection may show up again, but is easier to overcome because you can shift focus to other areas of deal, like payment.

I do think your dealership's pay plan may be adversely influencing your sales process and having you do things that put up road blocks on the road to sell. (i.e. you wrote: "but as soon as I discover what they are doing I refuse to assist them, and advise them this is unethical and refer them back to their original salesperson.")

This is why I do not prefer seperate Internet departments. They seem to cause more problems then they solve. Every salesperson should be in the Internet Department.

 

[Frank Davis]

I will stop now as you have this very convaluted, as I did not write :
"but as soon as I discover what they are doing I refuse to assist them, and advise them this is unethical and refer them back to their original salesperson.") Chris said that qoute: Have a great day